1
Fair Work Act 2009
s.604 - Appeal of decisions
City of Sydney RSL & Community Club Limited
v
Mrs Roxanna Balgowan
(C2017/4535)
DEPUTY PRESIDENT GOSTENCNIK
DEPUTY PRESIDENT CLANCY
COMMISSIONER SAUNDERS MELBOURNE, 25 OCTOBER 2017
Appeal against decision ([2017] FWC 3798) and order (PR594678) of Commissioner
Cambridge at Sydney on 27 July 2017 in matter U2017/4635 – arguable case of appellable
error established; public interest enlivened – permission to appeal granted.
Introduction
[1] On 16 August 2017, City of Sydney RSL & Community Club Ltd (the Club) lodged
an appeal, for which permission is necessary, against a decision1 (Decision) and order2
(Order) of Commissioner Cambridge in which the Commissioner determined that Ms
Roxanna Balgowan had been unfairly dismissed and ordered compensation be paid to Ms
Balgowan in the amount of $13,566.00, subject to appropriate taxation, within 21 days.
[2] At the permission to appeal hearing (PTA hearing), the Club was represented by Mr
Chris Mossman of the Registered Clubs Association of New South Wales. Ms Balgowan
appeared on her own behalf and was granted permission to attend the PTA hearing via
telephone.
Background
[3] Ms Balgowan commenced employment with the Club on 26 October 2015 and her
Form F2 - Unfair dismissal application (Application) alleged she was dismissed on 28 April
2017. Ms Balgowan’s Application was received in the Fair Work Commission on 1 May
2017. The Club’s Form F3 – Employer Response to Unfair Dismissal Application stated that
Ms Balgowan resigned her employment on 10 April 2017 and it raised the jurisdictional
objection that Ms Balgowan had not been dismissed.3
1 [2017] FWC 3798.
2 PR594678.
3 Fair Work Act 200, ss 385 & 386.
[2017] FWCFB 5537
DECISION
E AUSTRALIA FairWork Commission
[2017] FWCFB 5537
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[4] Commissioner Cambridge determined it was the actions of the Club which brought the
employment to an end and that Ms Balgowan was constructively dismissed. The
Commissioner went on to state that the dismissal of Ms Balgowan had been assessed against
all of the criteria contained in s.387 of the Act and there was a “compelling basis to establish
that the dismissal of the applicant was harsh, unjust and unreasonable.”4 The Commissioner
ordered compensation be paid to Ms Balgowan as described in paragraph [1] above.
[5] In lodging its appeal, the Club sought a stay of the Decision and Order. A stay hearing
was conducted by Deputy President Clancy on 22 August 2017. The parties consented to an
order5 staying the Decision and Order. The stay was granted on the condition that the sum of
$13,566.00, which was otherwise to be paid to Ms Balgowan pursuant to the Order, was to be
placed by the Club into an interest bearing account until the determination or disposition of
the appeal.
Decision under appeal
[6] The Commissioner set out the factual background to Ms Balgowan’s employment in
paragraphs [5] to [17] of the Decision.
[7] The Commissioner’s conclusion as to whether Ms Balgowan had been dismissed was
as follows:
“[36] In the present case, the applicant rejected the changes to the employment that
were imposed by Ms Faaui during the meeting held on 10 April. The basis for the
applicant’s rejection of the changed employment circumstances was neatly
summarised by the hand written notes that were made by Ms Faaui at the time, and
which included; “Roxy resigned stating that she would not have enough shifts.”
[37] The change that Ms Faaui imposed upon the applicant’s employment involved her
removal from all rostered shifts that involved work in the “change box”. This alteration
was said to have been necessary because of the second instance involving a cash
handling discrepancy, and the need to have the applicant undergo training to improve
her cash handling procedure. However, this change would result in a reduction of at
least about 75% in the applicant’s remuneration. Further, although there was contest as
to whether any mention was made of having the applicant undergo training in cash
handling, the reduction in remuneration was recorded by the notes made by Ms Faaui
to be for a period of “up to 3 months”.
[38] As previously mentioned, if upon objective analysis, the actions of the employer
which involved changes to the employment were so egregious as to represent the
repudiation of the employment, then the applicant would be able to treat the
employment to be at an end. On any reasonable and objective contemplation, an
indefinite reduction in remuneration of at least 75% would represent a repudiation of
the employment which the applicant could properly reject.
[39] Consequently, it was the actions of the employer which brought the employment
to an end. The decision by the employer to remove the applicant from regularly
4 [2017] FWC 3798 at [44].
5 PR595529.
[2017] FWCFB 5537
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rostered engagements in the “change box” resulted in a 75% reduction in remuneration
for the applicant. The applicant was entitled to reject an alteration to the employment
of such significance, and to treat the actions of the employer as a repudiation of the
employment. Therefore the applicant was constructively dismissed.” (references
omitted)
[8] As to whether the termination of Ms Balgowan’s employment was harsh, unjust or
unreasonable, the Commissioner found:
“[42] Consequently, a careful analysis of the circumstances in this instance has
established that it was the actions of the employer that operated as the real and
effective initiator of the termination of the employment. The applicant was a person
dismissed from employment, and the jurisdictional objection as advanced by the
employer must be dismissed.
[43] Further, as the applicant was a dismissed employee and a person protected from
unfair dismissal, the dismissal which involved circumstances of a second, but
unexplained cash handling discrepancy, did not provide valid reason for dismissal.
Further, the dismissal of the applicant has been assessed against all of the criteria
contained in s. 387 of the Act.
[44] In summary, the dismissal of the applicant was without valid reason involving
established misconduct or capacity inadequacy. Further, the dismissal was
implemented by way of an unreasonable and unjust process. Consequently, upon
analysis of the various factors that are identified in s. 387 of the Act, an objective and
balanced evaluation of all of the relevant circumstances provides compelling basis to
establish that the dismissal of the applicant was harsh, unjust and unreasonable.
[45] Therefore, the applicant’s claim for unfair dismissal remedy has been
established.”
[9] In assessing remedy, the Commissioner stated:
“[48] Section 392 of the Act prescribes certain matters that deal with compensation as a
remedy for unfair dismissal. I have approached the question of compensation having
regard for the guidelines that were established in the Full Bench Decision in Sprigg v
Paul’s Licensed Festival Supermarket and as commented upon in the subsequent Full
Bench Decision in Smith and Ors v Moore Paragon Australia Ltd.
[49] Firstly, I confirm that an Order for payment of compensation to the applicant will
be made against the employer in lieu of reinstatement of the applicant.
[50] Secondly, in determining the amount of compensation that I Order, I have taken
into account all of the circumstances of the matter including the factors set out in
paragraphs (a) to (g) of subsection 392 (2) of the Act.
[51] There was no evidence that an Order of compensation would impact on the
viability of the employer’s enterprise.
[2017] FWCFB 5537
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[52] The applicant had approximately 18 months of service. The applicant would have
been likely to have received remuneration of approximately $847.89 per week if she
had not been dismissed.
[53] The employment of the applicant would not have continued beyond her
anticipated resignation date of 31 July 2017.
[54] Following the dismissal, the applicant has attempted unsuccessfully to mitigate
the loss suffered because of the dismissal.
[55] Thirdly, in this instance there was no established element of past misconduct of
the applicant which can be said to have contributed to the employer's decision to
dismiss.
[56] Fourthly, I confirm that any amount Ordered does not include a component by
way of compensation for shock, distress or humiliation, or other analogous hurt caused
to the applicant by the manner of the dismissal.
[57] Consequently, for the reasons outlined above I have decided that an amount
approximating with 16 week’s remuneration should be provided as compensation to
the applicant. That amount is $13,566.00. Accordingly, separate Orders [PR594678]
providing for remedy in these terms will be issued.” (references omitted)
Grounds of appeal and contentions
[10] The Club’s Notice of Appeal contains eleven grounds of appeal which we need not
reproduce.6 It is sufficient for present purposes to group the grounds under three broad
descriptors; the ‘repudiation grounds’ (grounds 1-5), the ‘valid reason and process grounds’
(grounds 6-10) and the ‘compensation ground’ (ground 11).
The repudiation grounds
[11] The Club submitted in order to establish there had been a repudiation of the contract of
employment, it would have been necessary to demonstrate that Ms Balgowan had a
contractual entitlement to work change box shifts and/or a contractual entitlement to work 30
hours per week, neither of which were entitlements Ms Balgowan had as a casual employee.
The Club submitted there can be no serious breach or repudiation unless it is clear there has
been or will be a breach of a particular, identified and proven term and therefore, the
Commissioner’s determination that there was a serious or egregious breach of the
employment contract is a significant error of fact and inconsistent with established authority.
[12] In addition, the Club submitted the Commissioner made the following significant
errors of fact:
(a) that Ms Balgowan would suffer an indefinite reduction of 75% in remuneration.
The Club contends that although Ms Balgowan would only be performing one more
shift (Anzac Day) in the particular roster, she would be offered bar shifts instead of
6 Form F7 – Notice of Appeal dated 16 August 2017 at 2.1.
http://www.fwc.gov.au/awardsandorders/html/PR594678.htm
[2017] FWCFB 5537
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cash box shifts while retraining from the commencement of the next shift roster and
during her retraining;
(b) determining Ms Balgowan would suffer a reduction of 75% in remuneration did
not take into account the fact she would be paid public holiday penalty rates when
working on Anzac Day;
(c) Ms Elenoa Faaui’s notes do not say there would be a reduction in remuneration for
up to 3 months, but rather state the retraining process is up to 3 months and then refer
to the offer of bar shifts instead of cash box shifts;
(d) the Commissioner assumed the retraining would be unpaid; and
(e) the Commissioner did not have regard to the evidence that bar shifts would be
offered to Ms Balgowan instead of cash box shifts during the retraining period.
(references omitted)
[13] At the PTA hearing, the Club submitted there had been these abovementioned
significant errors of fact, but in the alternative, if one accepted that there were no significant
errors of fact, the finding of repudiation could still not stand because there have not been any
breaches of any identifiable contractual terms.7
[14] The Club also submitted the Commissioner did not go on to decide whether there was
any other basis to conclude that Ms Balgowan had been dismissed within the meaning of
s.386(1)(b) of the Act and had it done so, then scrutiny of the conduct of Ms Balgowan,
particularly her refusal to engage in retraining or to take bar shifts, would be required.8
The valid reason and process grounds
[15] The Club submitted a decision maker is under a duty to provide adequate reasons and
non-compliance with this duty is a sufficient ground for permission to appeal to be granted.9 It
submitted the Commissioner did not provide adequate reasons for the determination there was
not a valid reason for dismissal and/or that the dismissal was implemented by way of an
unreasonable and unjust process, particularly having regard to the following:
(a) Ms Balgowan was given the opportunity to respond to the allegation of a cash
discrepancy and was unable to provide a reasonable or adequate reason for the
discrepancy;
(b) Ms Balgowan was notified of the reasons why the decision to temporarily remove
her from change box shifts was taken;
(c) the past warning issued to Ms Balgowan in respect to cash discrepancy;
(d) the previous offer of retraining;
7 Transcript PN 87 (7 September 2017).
8 See Pawel v Advanced Precast Pty Ltd S5904 at [13].
9 Dianna Smith T/A Escape Hair Design v Sally-Anne Fitzgerald [2011] FWAFB 1422.
[2017] FWCFB 5537
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(e) Ms Balgowan’s refusal to undertake retraining;
(f) the Club’s renewed offer of retraining and the offer of bar shifts whilst the
retraining was being conducted;
(g) Ms Balgowan’s prior admissions that the cash discrepancies were her fault;
(h) the seriousness of the discrepancies; and
(i) the prior notification given to Ms Balgowan that the Club viewed the issue of cash
discrepancies as a disciplinary matter.
[16] The Club submitted the finding that there was no valid reason for dismissal amounted
to a significant error of fact.
[17] The Club submitted further or in the alternative, the Commissioner did not have
regard, or sufficient regard, to the matters referred to at [15] above in circumstances giving
rise to a misapplication of s.387 of the Act, which the Club contends is a sufficient ground for
the granting of permission to appeal.10
The compensation ground
[18] The Club submitted the Commissioner gave no regard to and did not apply a
contingency, as required by Sprigg v Paul’s Licensed Festival Supermarket.11 It said the
contingency the Commissioner ought to have regard to was that Ms Balgowan would have
caused another cash discrepancy before the commencement of her leave, and the chance of
that contingency was high, having regard to:
(a) had Ms Balgowan not resigned, she would have been issued with a second warning
in relation to her conduct with the cash discrepancy;
(b) Ms Balgowan had refused all attempts by the Club to retrain her in cash handling
procedure;
(c) the prior incidents of the cash mishandling occurred within a short period of time;
and
(d) a further incident of cash mishandling would have likely brought Ms Balgowan’s
employment to an immediate end.
[19] However, the Club conceded that the issue of a contingency applying was not raised
before the Commissioner, and nor were the parties invited to make submissions in this
respect.
[20] Nonetheless, the Club contended the Commissioner’s error in not giving any
consideration and/or not applying a contingency to the calculation of the quantum of
10 Aperio Group (Australia) Pty Ltd T/A Aperio Finewrap v V Sulemanovski [2011] FWAFB 1436.
11 Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21.
[2017] FWCFB 5537
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compensation is an error which caused a misapplication of Sprigg and a serious injustice to
the Club, which supports a finding that permission to appeal should be granted.
Public interest
[21] The Club contends that there is an arguable case of one or more appellable errors
raised by its various appeal grounds which disclose a misapplication of s.387 of the Act and
Sprigg. It says therefore that the public interest is enlivened. It also contends that the decision
manifests an injustice to the Club, that the result is counter intuitive and disharmonious when
compared to previous decisions and the public interest is thereby enlivened.
Submissions - Ms Balgowan
[22] Ms Balgowan made oral submissions at the PTA hearing, which largely went to her
dissatisfaction with the Club’s action in filing its appeal; that the Club had never raised
retraining with her and that she “just wanted what was fair.”12
Consideration – Permission to Appeal
[23] An appeal under s.604 of the Act is an appeal by way of rehearing and the
Commission’s powers on appeal are only exercisable if there is error on the part of the
primary decision maker.13 There is no right to appeal and an appeal may only be made with
the permission of the Commission.
[24] This appeal is one to which s.400 of the Act applies. Section 400 provides:
(1) Despite subsection 604(2), the FWC must not grant permission to appeal from a
decision made by the FWC under this Part unless the FWC considers that it is in the
public interest to do so.
(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation
to a matter arising under this Part can only, to the extent that it is an appeal on a
question of fact, be made on the ground that the decision involved a significant error
of fact.
[25] In the Federal Court Full Court decision in Coal & Allied Mining Services Pty Ltd v
Lawler and others, Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised
the test under s.400 as “a stringent one”.14 The task of assessing whether the public interest
test is met is a discretionary one involving a broad value judgment.15 In GlaxoSmithKline
Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the
considerations that may attract the public interest:
12 Transcript PN 152 (7 September 2017).
13 This is so because on appeal the Commission has power to receive further evidence, pursuant to s.607(2); see Coal and
Allied v AIRC (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ.
14 (2011) 192 FCR 78 at [43].
15 O’Sullivan v Farrer (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch
(2011) 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services
Pty Ltd v Lawler and others (2011) 192 FCR 78 at [44] -[46].
[2017] FWCFB 5537
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“... the public interest might be attracted where a matter raises issues of importance
and general application, or where there is a diversity of decisions at first instance so
that guidance from an appellate court is required, or where the decision at first
instance manifests an injustice, or the result is counter intuitive, or that the legal
principles applied appear disharmonious when compared with other recent decisions
dealing with similar matters.”16
[26] It will rarely be appropriate to grant permission to appeal unless an arguable case of
appellable error is demonstrated. This is so because an appeal cannot succeed in the absence
of appellable error.17 However, the fact that the member at first instance made an error is not
necessarily a sufficient basis for the grant of permission to appeal.18
[27] An application for permission to appeal is not a de facto or preliminary hearing of the
appeal. In determining whether permission to appeal should be granted, it is unnecessary and
inappropriate for the Full Bench to conduct a detailed examination of the grounds of appeal.19
[28] We consider that an arguable case of error has been established and the public interest
is enlivened by the appeal. Our reasons for this conclusion follow below.
[29] As earlier noted the Club advances eleven appeal grounds in its Notice of Appeal. We
need only deal with two of the grounds which form part of the “repudiation grounds” for the
purposes of determining this application for permission to appeal.
[30] The Commissioner held that the actions of the Club changed the employment of Ms
Balgowan by imposing an indefinite reduction in her remuneration and this represented the
repudiation of the employment. The Commissioner found that the Club’s action had brought
the employment to an end, as Ms Balgowan was forced to resign because of it. In ground 4,
the Club contends that the Commissioner erred in concluding that there was an indefinite
reduction in Ms Balgowan’s remuneration of at least 75%. The findings of the Commissioner
at paragraphs [37]-[39] and [41] of the Decision appear to us to be arguably inconsistent with
the matters set out at [12] above. In particular, the evidence before the Commissioner that bar
shifts would be offered to Ms Balgowan during her period of retraining appears to us to be
arguably inconsistent with his conclusion. We are therefore satisfied it is arguable there was a
failure by the Commissioner to take this evidence into account. That relevant considerations
are not taken into account is an appellable error. We are persuaded it is arguable that ground 4
of the Notice of Appeal raises an arguable case of appellable error.
[31] Ground 2 of the Notice of Appeal contends that the Commissioner erred in concluding
that the alleged breach of the contract of employment was an egregious or serious breach
which represented a repudiation of the said contract of employment. The Club submits this
finding is a significant error of fact and inconsistent with established authority.
16 [2010] FWAFB 5343, 197 IR 266 at [27].
17 Wan v AIRC (2001) 116 FCR 481 at [30].
18 GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343 at [26]-[27], 197 IR 266; Lawrence v Coal & Allied
Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth [2010] FWAFB 10089 at [28], 202 IR 388, affirmed on
judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; NSW Bar Association v Brett
McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28].
19 Trustee for The MTGI Trust v Johnston [2016] FCAFC 140 at [82].
[2017] FWCFB 5537
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[32] The Club submits that in order to repudiate a contract of employment, a contractual
term must be breached and Ms Balgowan, as casual employee, had no contractual entitlement
to work change box shifts and/or a contractual entitlement to work 30 hours per week. In the
absence of such contractual terms, it is submitted, there can be no serious breach or
repudiation.
[33] We consider it is arguable that the Commissioner erred in finding there was a
contractual entitlement to work change box shifts and/or a contractual entitlement to work 30
hours per week. This conclusion appears to us to be arguably inconsistent with the evidence
that “Ms Balgowan was rostered an average of approximately 30 hours per week. However,
this fluctuated dependent on the operational needs of the Club as well as the nature of the
casual employment”.20 The conclusion is also arguably inconsistent with the Commissioner’s
characterisation of Ms Balgowan’s duties which he set out in the Decision as follows:
“The work that the applicant performed involved a variety of general hospitality duties
including bar attendant, café, cash box and gaming floor services. As part of her role,
the applicant often performed cash handling duties.”21
[34] We are therefore persuaded that ground 2 of the Notice of Appeal raises an arguable
case of appellable error.
[35] Having regard to the Commissioner’s ultimate findings and award of compensation to
Ms Balgowan the nature of the arguable appellable errors identified, if made good on appeal,
would likely result in a different outcome. We therefore consider that there is an arguable case
of injustice sufficient to enliven the public interest.
Conclusion
[36] For the reasons given, permission to appeal is granted. The parties will be separately
advised as to the further conduct of the appeal.
DEPUTY PRESIDENT
Appearances:
20 Exhibit 4 at paragraph (6), cited in the Decision at [5].
21 [2017] FWC 3798 at [5]
THE FAIR WORK COMMISSION SEAL OF
[2017] FWCFB 5537
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Mr C Mossman for City of Sydney RSL & Community Club Ltd
Ms R Balgowan on her own behalf
Hearing details:
2017.
September 7.
Melbourne via VC to Sydney.
Printed by authority of the Commonwealth Government Printer
Price code C, PR597095
